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Wall Street ends lower on Omicron, Biden spending plan setbacks; oil falters

Stock Markets Dec 20, 2021 06:05PM ET
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2/2 © Reuters. FILE PHOTO: A man walks past a stock quotation board at a brokerage in Tokyo, Japan February 26, 2021. REUTERS/Kim Kyung-Hoon 2/2
 
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By Jessica DiNapoli

NEW YORK (Reuters) -U.S. stocks ended trading on Monday down by more than 1%, pressured lower by surging Omicron coronavirus cases and a possible fatal blow to a $1.75 trillion U.S. domestic spending bill, with oil prices plunging.

U.S. stock indexes retreated more than 1% as positive COVID-19 case counts rose and President Joe Biden's social spending and climate bill hit a significant setback. U.S. COVID-19 cases have risen 50% this month, and the World Health Organization has said that cases are doubling in 1-1/2 to three days in areas with community transmission.

Oil investors feared that new restrictions, which European countries are implementing, would weigh on fuel demand, sending crude prices lower.

"It was kind of a triple whammy on the economy over the weekend: Omicron, the Fed, and taking the fiscal initiative off the table," said Jack Ablin, chief investment officer at Cresset Capital Management. "The market is taking a hit. I think it’s an economic reset that investors are kind of gauging."

The economic scare comes after the Federal Reserve decided last week to end its pandemic-era stimulus more quickly, with the central bank signaling at least three quarter-percentage-point interest rate hikes by the end of 2022.

In light of rising COVID-19 cases, the World Economic Forum postponed its annual meeting, which had been due to take place in the Swiss mountain resort of Davos in January, until mid-2022.

Some economists expect the U.S. economy to grow more slowly next year after U.S. Senator Joe Manchin, a conservative Democrat who is key to Biden's hopes of passing the investment bill, said on Sunday he would not support the package.

The Dow Jones Industrial Average closed 1.23% lower at 34,932.16, while the S&P 500 ended the day down 1.14% at 4,568.02. The Nasdaq Composite dropped 1.24% to 14,980.94.

MSCI's gauge of stocks across the globe shed 1.35%.

Oil prices dropped amid concerns the spread of the Omicron variant would crimp demand for fuel. [O/R]

U.S. crude recently fell 2.12% to $69.22 per barrel and Brent was at $72.01, down 2.05% on the day.

While coronavirus restrictions cloud the outlook for economic growth, they also risk keeping inflation elevated, prompting central banks to consider raising rates.

The dollar came under pressure on Monday as U.S. Treasury yields slipped. The dollar index fell 0.137%. In recent weeks it has rallied, and is up about 7% for the year.

The yield on the three-year Treasury note was down 1.9 basis points at 0.9069% in afternoon trading, while yields on longer-term government debt rose throughout the day.

Wall Street ends lower on Omicron, Biden spending plan setbacks; oil falters
 

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Comments (23)
Mark Stallone
Mark Stallone Dec 20, 2021 2:43PM ET
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RELAX. It's all part of Building Back "Better". L.G.B.
Mitchel Pioneer
Mitchel Pioneer Dec 20, 2021 2:33PM ET
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Of course all 3 indices are off their lows, as the mid-day intervention begins with clockwork precision.  Can't have a single day in this laughable "market" without a good dose of fraud and criminal manipulation.
Daniel Zimmerman
Daniel Zimmerman Dec 20, 2021 2:24PM ET
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People can’t even get a cold anymore without the government and media telling them they will die from it. Wake up.
TheEnd IsNigh
TheEnd IsNigh Dec 20, 2021 2:24PM ET
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"...a winter of severe illness and death..." Repent, repent! The end is nigh!
Jeremy Johnson
Jeremy Johnson Dec 20, 2021 2:14PM ET
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Amazing how the yearly cold and flu season keeps starting a sell-off
Jeremy Johnson
Jeremy Johnson Dec 20, 2021 2:11PM ET
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Amazing how the yearly cold and flu season keeps sparing a sell-off.
Paul Dunne
Paul Dunne Dec 20, 2021 12:47PM ET
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It's a disgrace all the people in ICUs pretending that they can't breathe. Covid fact: they recently opened the graves of 512 people who had "died" from Covid and all but 2 were empty. The great Covid Conspiracy. There should be a law against pretending to be dead.
Show previous replies (3)
Barani Krishnan
Barani Krishnan Dec 20, 2021 12:47PM ET
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Paul Dunne  The neuro facilities are open, I believe.
Paul Dunne
Paul Dunne Dec 20, 2021 12:47PM ET
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Some people don't recognise sarcasm when they see it. :)
Barani Krishnan
Barani Krishnan Dec 20, 2021 12:47PM ET
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Paul Dunne  I'm playing along, mate :)
Barani Krishnan
Barani Krishnan Dec 20, 2021 12:47PM ET
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Paul Dunne  I've seen the history of your commenting :)
Paul Dunne
Paul Dunne Dec 20, 2021 12:47PM ET
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I didn't know that one could view a comment history. How do we do that, pray tell? It could be a revelation to see what the old me might have written when I wasn't myself. I'm quite well now though, obviously.
Stefan Kunco
Stefan Kunco Dec 20, 2021 12:44PM ET
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What problem will they come up with for the new year, or may it not be necessary because they will be able to devastate the markets completely?
John Whitfield
John Whitfield Dec 20, 2021 12:16PM ET
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this plandemic has revealed just how stupid they've made this country.
Jack Hoodie
Jack Hoodie Dec 20, 2021 12:16PM ET
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0r always been
CFG fdez
CFG fdez Dec 20, 2021 12:16PM ET
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you represent that stupidity.
Barani Krishnan
Barani Krishnan Dec 20, 2021 12:16PM ET
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CFG fdez  Well said.
Emin Mammadzada
Emin Mammadzada Dec 20, 2021 12:16PM ET
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Agree, adding other countries.
James Vandervest
James Vandervest Dec 20, 2021 12:14PM ET
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The Globalist Great Reset- of which Build Back Better is just the American Puppet arm, is NOT an economic positive unless your name is Rothschild, Pelosi or Biden. It would ruin this country worse than it is already being ruined by these Subversive Bolsheviks. The market is correcting BECAUSE of these kind of insane policies have inflated an unsustainable asset bubble, and the chickens are coming home to roost. Save this kind of ridiculous analysis for Tik Tok.
Robert Ivan
Robert Ivan Dec 20, 2021 12:10PM ET
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what does omicron and alec Baldwin have in common? They killed the same amount of people
hd tv
hd tv Dec 20, 2021 12:10PM ET
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didn't know Alec Baldwin has killed atleast 12 people
 
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